Arcadia Group demands 2 percent discount from suppliers to remain 'competitive'

London - Sir Philp Green’s Arcadia Group is implementing a 2 percent discount on all orders in place and future orders from its suppliers from next month onwards to “remain competitive in the global market.”

The retail company, which owns high street brands such as Topshop, Miss Selfridge and Dorothy Perkins, reportedly told suppliers that it would pay 2 percent less on existing and future orders from February 1 to help save the company millions. Arcadia’s CEO Ian Grabiner linked the cost-cutting measures to recent changes in the retail market. In a letter sent to suppliers, Grabiner said the retail group had already “absorbed significant costs in technology, distribution and people” and hoped suppliers would “continue to support” them, according to various media reports.

Arcadia has confirmed the move. “We recently asked our suppliers for a small increase in our discount terms. The cost of servicing and delivering to our customers through new channels is considerably higher than through the traditional retail marketplace.This has resulted in major investment in our infrastructure in terms of systems and distribution as well as a large headcount increase. These substantial developments to our business will mutually benefit our suppliers.”

The cost-cutting measure comes after a flurry of weak sales across Arcadia’s brands, which saw total profits fall 79 percent in 2016 following the fall of BHS and its ongoing pension scandal.